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Crucell Reports Third Quarter 2010 Results

LEIDEN, NETHERLANDS--(Marketwire - November 9, 2010) -

Crucell Reports Third Quarter 2010 Results

One-time inventory provision for Quinvaxem® stock of EUR22.8
million.

Total revenues and other operating income of EUR89.5 million compared
to
EUR94.3 million in the same period in 2009.
Operating loss of EUR31.1 million compared to operating profit of
EUR15.5 million in Q3 2009. Net loss of EUR27.0 million compared to net
profit of
EUR10.0 million in Q3 2009 due to write-downs of Quinvaxem®
inventory.
Undiluted EPS of minus EUR0.33 compared to EUR0.15 in the same quarter of
2009.

Change of 2010 guidance: total revenues and other operating income[1] for
the
full year expected to be in-line with 2009 levels. Due to the one-time
provision, operating loss for the year expected to be EUR20-25 million.

Leiden, the Netherlands (November 9, 2010) - Dutch biopharmaceutical
company
Crucell N.V. (NYSE Euronext, NASDAQ: CRXL) (SWISS: CRX) today announced
its financial results for the third quarter of 2010, based on
International
Financial Reporting Standards (IFRS). These financial results are
unaudited.

Business Highlights:

* On October 28, 2010 Crucell announced that it has put a temporary hold
on
all shipments of Quinvaxem® and Hepavax-Gene®. Crucell also
suspended
production at the Shingal facility in Korea as the sterile operation
had
been compromised during recent operations. Current analysis indicates
that a
microbiological contamination has occurred and investigation into the
root
cause is ongoing. The Shingal facility was already scheduled to be
vacated
next year. The operations in our new Incheon facility are not affected.
There are no concerns in terms of product safety in relation to the use
of
any of the vaccines that have already been distributed. All products
currently in the market were manufactured in compliance with GMP
regulations
and have passed all release tests, including, without exception, all
sterility analyses.
The investigation into the root cause of the contamination is
progressing
well and actions are being taken to resume manufacturing at the Shingal
facility in the coming weeks. The company has taken a EUR22.8 million
inventory provision on all Quinvaxem® stock. Crucell's
responsibility to the
children in developing countries is paramount and we have committed all
required resources to resolve this issue expeditiously. We are working
with
all stakeholders to understand the circumstances surrounding these
events
and to assess the situation.

* On October 6, 2010 Johnson & Johnson and Crucell announced an agreement
whereby Johnson & Johnson, through an affiliate, would acquire all
outstanding equity of Crucell that it does not already own for
approximately
EUR1.75 billion in a recommended cash tender offer; this reflects an
intended
all cash offer of EUR24.75 per share for all outstanding shares not
already
owned by Johnson & Johnson. As reported by Johnson & Johnson in the
press
release, Crucell would become the center for vaccines within the
Johnson &
Johnson pharmaceutical group whilst retaining its innovative and
entrepreneurial culture and dedicated employees. Crucell expects that
it
would further accelerate and expand its product and pipeline
development, as
well as its ability to provide vaccines to people around the world, as
a
Johnson & Johnson company.

* On October 29, 2010 Johnson & Johnson and Crucell reported that the
companies are making progress on the preparations for the intended
public
offer. Johnson & Johnson reported that it currently expects to request
and
obtain the final approval of the offer document from the AFM and to be
in a
position to launch the Offer before the end of November, as previously
announced.

* Crucell today announces the start of a discovery program leading to the
development and commercialization of an Human Papilloma Virus (HPV)
vaccine.
This discovery program is part of the existing strategic collaboration
with
Johnson & Johnson, through its subsidiary Ortho-McNeil-Janssen
Pharmaceuticals, Inc., signed in September 2009, to develop innovative
products, including antibodies for influenza prevention and treatment.

* DSM and Crucell announced an expansion of the activities in their
existing
joint venture, the PERCIVIA PER.C6® Development Center (Cambridge,
Massachusetts, United States), to transform the company from a
development
center into a full biopharmaceutical company for the development of
PER.C6®-
based biobetter proteins and monoclonal antibodies as well as global
licensing of the PER.C6® human cell line for production of third
party
monoclonal antibodies and other proteins.

* Crucell and the Aeras Global TB Vaccine Foundation announced the start
of a
Phase II clinical trial in infants of the jointly developed
tuberculosis
vaccine candidate, AERAS-402/Crucell Ad35.

* Crucell announced that the International AIDS Vaccine Initiative (IAVI)
has
started with a Phase I clinical trial to evaluate the safety and
immunogenicity of two preventive AIDS vaccine candidates.

Financial Highlights:

* The Company announced combined total revenues and other operating
income of
EUR89.5 million, compared to EUR94.3 million in the third quarter of
2009. The
decrease was driven by a decline in respiratory vaccine sales.

* Product sales were EUR72.8 million, representing sales of paediatric
vaccines
(67%), travel and endemic vaccines (14%), respiratory vaccines (14%),
and
other products (5%). Higher sales of paediatric vaccines were more than
off-
set by lower sales of respiratory vaccines due to a later start of the
flu
season.

* Gross margins were 7%, compared to 39% in the third quarter of 2009.
Gross
margins were significantly impacted by the provision for
Quinvaxem®
inventory, pricing of Quinvaxem® sales, variation in product mix
and
negative operating variances.

* Research and development (R&D) expenses increased to EUR26.8 million,
compared
to EUR16.5 million in the third quarter of 2009 as R&D program spending
accelerated in line with guidance.

* Operating loss of EUR31.1 million for the third quarter, compared to
EUR15.5
million operating profit in the same period of 2009.

* Net loss of EUR27.0 million for the third quarter of 2010, compared to
a net
profit of EUR10.0 million in the third quarter of 2009. Net loss per
share of
EUR0.33, compared to a net profit per share of EUR0.15 in the same
period of
2009.

* Cash from operating activities decreased to EUR17.3 million compared to
EUR72.1
million in the same period of 2009. In the third quarter of 2009 the
cash
received from the Johnson & Johnson collaboration, relating to the
development programs, was included in the cash from operating
activities.

* Cash from investing activities amounted to EUR29.1 million in the third
quarter, which is mainly due to reclassification of financial deposits.

* Net cash from financing activities in the quarter amounted to EUR0.2
million
compared to EUR235.0 million in the same period of 2009, as the third
quarter
of 2009 included the 18% equity stake of Johnson & Johnson.

* Cash and cash equivalents increased by EUR46.6 million during the third
quarter to EUR292.1 million.

"Resolving the contamination issue in our Shingal facility is our
number one
priority. We are totally committed to provide children in developing
countries
with the highest quality vaccines. We have mobilized all required
resources to
investigate and correct the problem so we can resume shipments in the
coming
weeks.

We are working together with all stakeholders to understand and correct the
root
cause of the contamination. We have no concerns about the safety of our
products
in the market, which have passed all release tests. We remain confident
in the
safety and quality of our most important paediatric vaccine
Quinvaxem® and its
role to protect children in the developing world against five
important
infectious diseases.

In October we reached an agreement with Johnson & Johnson for an
intended all
cash offer of EUR24.75 per share. We will hold an informational EGM on
December
10, 2010 to discuss the offer in more detail with our shareholders. The
Crucell
Boards fully support this offer as this potential transaction creates a
powerful
platform for vaccine development. This potential transaction would allow
Johnson
& Johnson to invest in the development of Crucell's products and
pipeline and
support Crucell's mission to increase the number of people around the
globe
protected from infectious diseases."

Product Sales Update:

Product sales in the third quarter of 2010 decreased 13% over the same
quarter
in 2009 to EUR72.8 million and represent sales of paediatric vaccines
(67%),
travel and endemic vaccines (14%), respiratory vaccines (14%), and
other
products (5%). Higher sales of paediatric vaccines were more than off-
set by
lower sales of respiratory vaccine sales due to a later start of the flu
season.

Paediatric vaccines

Crucell has established that recently the sterile operation of our
Shingal
facility (Korea) had been compromised. As a precautionary measure we have
put a
temporary hold on all shipments of Quinvaxem® and Hepavax-
Gene® that were
planned for delivery. The investigation into the root cause of the
contamination
is progressing well and actions are being taken to resume manufacturing
at the
Shingal facility in the coming weeks. The company has taken a EUR22.8
million
inventory provision on all Quinvaxem® stock, related to the
contamination.

All products currently in the market have passed all release tests,
including,
without exception, all sterility analyses. There are no concerns in
relation to
the use of any of the material that was distributed in terms of product
safety.

In the third quarter, Quinvaxem® sales were strong due to additional
demand from
UNICEF and PAHO.

Travel and endemic vaccines

After a strong first half of this year, travel sales in the third
quarter of
2010 were flat compared to the same quarter of last year. We continue
to see
progress in upscaling the production process, required to prepare
for
introduction of Epaxal® in the US.

Respiratory vaccines

Sales of Crucell's influenza vaccine Inflexal® V in the quarter were
lower due
to strong comparables in the same quarter last year driven by a
strong flu
season last season. Due to limited availability of flu antigen and
weaker
overall demand, fourth quarter 2010 sales of Inflexal® V are
expected to be
lower than the fourth quarter in 2009.

Research & Development Highlights:

* Human Monoclonal Antibodies against a broad range of Influenza strains
(pre-
clinical): In September 2009 Johnson & Johnson (JNJ), through its
subsidiary
Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Crucell entered into a
strategic collaboration for the development and commercialization of a
universal monoclonal antibody product (flu-mAb) for the treatment and
prevention of influenza. An important activity in the development of
this
flu-mAb has been the first production of this antibody product in a
mobile
and fully disposable FlexFactory®. In addition the strategic
collaboration
involves four innovative discovery programs focusing on the development
and
commercialization of a universal influenza vaccine as well as vaccines
directed against three other infectious and non-infectious disease
targets -
including RSV and HPV (see below). Activities for the universal
influenza
vaccine, which started in January, are ongoing. The universal influenza
vaccine will be designed based on specific epitopes of our broadly
cross-
neutralizing influenza antibodies. The selection of the other
innovation
targets is ongoing.

* Therapeutic Human Papilloma Virus (HPV) Vaccine (pre-clinical): Today
Crucell announces the start of a discovery program leading to the
development and commercialization of an HPV vaccine. Genital infection
with
HPV is very common in both men and women and usually spontaneously
cleared
within one year after infection. In about 1% of individuals, however,
HPV
persists, ultimately resulting in genital neoplastic lesions. This
discovery
program is part of the strategic collaboration with JNJ (see above).

* Influenza - Seasonal Influenza Vaccine: Crucell has commenced with the
development of a cell-based influenza vaccine. The introduction of
cell-
based Inflexal® V will be the next important step for Crucell's
respiratory
franchise. Combining Crucell's high density PER.C6® production
system with
the company's proprietary virosomal technology creates a cutting-edge
method
to produce Inflexal® antigens both at large scale, at very
competitive cost
levels and earlier in the season. Crucell expects to apply for
licensure in
2014.

* AIDS/HIV Vaccine (Phase I): In April 2008, Crucell announced the start
of a
Phase I clinical study of the novel recombinant HIV vaccine. The
preliminary
results of this Phase I study were updated at the AIDS Vaccine 2010
conference in Atlanta, GA in Sept 2010 confirming the safety and
immunogenicity of this HIV candidate vaccine vector.

In August 2010 Crucell announced its participation in an international
Phase
I clinical trial in the United States and Africa of a combination of
two
AdVac®-based AIDS vaccine candidates, Ad26.ENVA.01 and Ad35-ENV,
in healthy
adults who are not infected with HIV. The clinical trial has started in
October 2010 and will be led by the International AIDS Vaccine
Initiative
(IAVI), representing a collaboration between IAVI, Crucell, the Ragon
Institute, and Beth Israel Deaconess Medical Center (BIDMC), a major
teaching hospital of Harvard Medical School.

The Ad26.ENVA.01 vaccine candidate used in this study is manufactured
by
Crucell, while the Ad35-ENV vaccine is developed by IAVI. Both vaccines
candidates are based on Crucell's proprietary AdVac® technology.
The planned
Phase 1 trial of the vaccine combination, which follows a Phase I trial
of
the Ad35-ENV vaccine by IAVI and a Phase I trial of Ad26.ENVA.01 by the
Harvard-Crucell consortium, supported by the National Institute of
Allergy
and Infectious Diseases (NIAID), represents a key step towards proof of
concept studies to evaluate the efficacy of the vaccine combination in
humans.

* Tuberculosis Vaccine (Phase II): To date, data from all AERAS-
402/Crucell
Ad35 trials support the immunogenicity and acceptable safety profile of
the
TB candidate vaccine at all dose levels evaluated.

A Phase II clinical trial in infants of AERAS-402/Crucell Ad35 started
in
October 2010. The main objective of the trial is to test the safety and
efficacy of the TB vaccine candidate in infants previously vaccinated
with
the Bacille Calmette-Guérin (BCG) vaccine, which is currently the
only
vaccine licensed to help prevent TB. The first part of this clinical
trial,
which is conducted in Kenya, will establish the optimal dosing regimen.
The
selected regimen will then be tested in the second part of the trial,
planned to begin in 2011 in Kenya, Mozambique, South Africa and Uganda.

* Rabies Human Monoclonal Antibody Combination/CL184 (Phase II):
Crucell's
monoclonal antibody combination against rabies is being developed in
collaboration with sanofi pasteur using Crucell's PER.C6®
manufacturing
technology. The Indian authorities released the material for the
additional
Phase II study in India. This start of this trial is now imminent. This
study is designed to collect safety and neutralizing activity data of
the
CL184 antibody in combination with the vaccine in a simulated rabies
post-
exposure prophylaxis setting.

Korean Production Facility:

In October 2008 Crucell announced that an agreement was reached to
relocate
Crucell's Korean production facility from the Shingal site in Yongin City,
Korea
to the Incheon Free Economic Zone, Korea. Construction activities at
the new
site started in December 2008 and technical completion was reached
within 13
months. First test runs started in May 2010 and are progressing
according to
plan. The results of the comparability studies done to date are
fully
satisfactory and most of the comparability work will be completed before
the end
of this year. The operations in the new Incheon facility are not affected
by the
contamination in the old factory. The new facility will enable the
further
growth and highly efficient production of Quinvaxem® and Hepavax-
Gene®, with a
capacity of over 100 million doses annually.

Manufacturing & Licensing Agreements:

* Crucell today announces that UK-based Eden Biodesign Limited, signed a
non-
exclusive Vendor Network Agreement, whereby Eden has become a pre-
approved
authorized provider of services for contract manufacturing on Crucell's
proprietary PER.C6® cell-line technology. Under the terms of the
agreement
Eden will be able to offer Contract Manufacturing Services to Crucell's
PER.C6® licensees in the field of vaccines and gene therapy.
Financial
details of the agreement were not disclosed. [Oct 2010]

PERCIVIA:

DSM and Crucell have expanded the activities in their existing joint
venture,
the PERCIVIA PER.C6® Development Center (Cambridge,
Massachusetts, United
States), to transform the company from a development center into a
full
biopharmaceutical company for the development of PER.C6®-based
biobetter
proteins and monoclonal antibodies as well as global licensing of the
PER.C6®
human cell line for production of third party monoclonal antibodies and
other
proteins.

The joint venture, in which DSM and Crucell will each hold an equal
equity
share, will be known as PERCIVIA LLC. The joint venture will broaden its
scope
and will focus on proprietary development of PER.C6®-based
biobetter proteins
and monoclonal antibodies, initially to early clinical stages.

Patents:

In Q3 2010 Crucell was granted a total of 34 patents, including patents
for:

* Aspects of PER.C6® recombinant protein glycoform expression
technology, in
the U.S.

* Different aspects of improved adenoviral AdVac® vectors, in India,
in Canada
and in Singapore

* Cell lines for improved adenovirus production, in Australia

* Elements of STAR® technology, in Europe, in Singapore and in the
U.S.

* Chimeric adenoviruses that can target different specific cell types, in
the
U.S.

The Company announced combined total revenues and other operating
income of
EUR89.5 million, compared to EUR94.3 million in the third quarter of
2009. The
decrease was driven by a decline in respiratory vaccine sales.

Product sales in the third quarter of 2010 decreased 13% over the same
quarter
in 2009 to EUR72.8 million and represent sales of paediatric vaccines
(67%),
travel and endemic vaccines (14%), respiratory vaccines (14%), and
other
products (5%).

License revenues were EUR5.2 million in the third quarter, compared
to EUR3.8
million in the third quarter of 2009. The increase is mainly due
to the
recognition of revenues from the JNJ collaboration which was signed in
September
2009.

Service fees for the quarter were EUR4.6 million, compared to EUR2.4
million in the
same quarter of 2009. Service fees represent revenues for product
development
activities performed under contracts with partners and licensees.

Other operating income was EUR6.9 million for the quarter, compared
to EUR4.4
million in the third quarter of 2009, reflecting a higher level
of R&D
reimbursements and one-time transactions.

Cost of Goods Sold

Cost of goods sold for the third quarter of 2010 amounted to EUR77.0
million
compared to EUR55.1 in the same quarter of the prior year.
EUR75.5 million
represents product costs; and EUR1.5 million the cost of service and
license
activities.

Gross margins were 7%, compared to 39% in the third quarter of 2009.
Gross
margins were significantly impacted by the provision for Quinvaxem®
inventory,
pricing of Quinvaxem® sales, variation in product mix and negative
operating
variances.

Expenses

Total expenses consisted of research and development (R&D) expenses,
marketing
and sales (M&S) and general and administrative (G&A) expenses. Total
expenses
for the third quarter were EUR43.6 million, representing a EUR19.9 million
increase
over the same period in 2009, driven by an increase in R&D expenses
and the
positive effect of the reversal of impairment in the third quarter of 2009.

R&D expenses for the third quarter amounted to EUR26.8 million,
representing an
increase of EUR10.3 million versus the third quarter of 2009 as R&D
program
spending accelerated in line with guidance.

SG&A expenses for the quarter were EUR16.7 million compared to EUR15.2
million in
the third quarter of 2009. This increase was mainly due to higher M&S
expenses,
partly as a result of the set-up of the new UK office.

Operating loss of EUR31.1 million for the third quarter, compared to an
operating
profit of EUR15.5 million in the same period of 2009.

Net Result

Net loss of EUR27.0 million was reported for the third quarter of 2009,
compared
to a net profit of EUR10.0 million in the third quarter of 2009. Net
loss per
share is EUR0.33, compared to a net profit per share of EUR0.15 in the
same period
of 2009.

Balance Sheet

Tangible fixed assets amounted to EUR239.3 million on September 30,
2010.
Intangible assets amounted to EUR82.6 million, including acquired in-
process
research and development, developed technology, patents and
trademarks, the
value of customer and supplier relationships, and capitalized IT
investments.

Investments in associates and joint ventures amounted to EUR13.5
million and
mainly represent investments in AdImmune and the PERCIVIA PER.C6®
Development
Center. Crucell's investment in Galapagos NV is classified under
available-for-
sale investments.

Total equity on September 30, 2010 amounted to EUR773.9 million. A total
of 81.7
million ordinary shares were issued and outstanding on September 30, 2010.

Cash Flow and Cash Position

Cash and cash equivalents increased by EUR46.6 million during the third
quarter to
EUR292.1 million. Short term financial assets include deposits with
maturities
over 90 days for an amount of EUR52.5 million. This reduction of EUR47.6
million was
due to the reclassification of longer term deposits, where the deposit
maturity
was reduced to 3 month or less.

Cash from operating activities decreased to EUR17.3 million compared
to EUR72.1
million in the same period of 2009. In the third quarter of 2009 the
cash
received from the Johnson & Johnson collaboration was included in the cash
from
operating activities.

Cash from investing activities amounted to EUR29.1 million in the third
quarter,
which is mainly due to reclassification of financial deposits.

Net cash from financing activities in the quarter amounted to EUR0.2
million
compared to EUR235.0 million in the same period of 2009, as the third
quarter of
2009 included the 18% equity stake of Johnson & Johnson.

Notes to the Condensed Consolidated Interim Financial Statements

The notes to Crucell's Financial Statements for the nine months period
ended
September 30, 2010 are available onwww.crucell.com.

About Crucell

Crucell N.V. (NYSE Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) is a
global
biopharmaceutical company focused on research development, production
and
marketing of vaccines, proteins and antibodies that prevent and/or
treat
infectious diseases. In 2009 alone, Crucell distributed more than 115
million
vaccine doses in more than 100 countries around the world, with the
vast
majority of doses (97%) going to developing countries. Crucell is one
of the
major suppliers of vaccines to UNICEF and the developing world. Crucell
was the
first manufacturer to launch a fully-liquid pentavalent vaccine.
Called
Quinvaxem®, this innovative combination vaccine protects against five
important
childhood diseases. Over 130 million doses have been sold since its
launch in
2006 in more than 50 GAVI countries. With this innovation, Crucell has
become a
major partner in protecting children in developing countries. Other
products in
Crucell's core portfolio include a vaccine against hepatitis B and a
virosome-
adjuvanted vaccine against influenza. Crucell also markets travel vaccines,
such
as an oral anti-typhoid vaccine, an oral cholera vaccine and the only
aluminum-
free hepatitis A vaccine on the market. The Company has a broad
development
pipeline, with several product candidates based on its unique PER.C6®
production
technology. The Company licenses its PER.C6® technology and other
technologies
to the biopharmaceutical industry. Important partners and licensees
include
Johnson & Johnson, DSM Biologics, sanofi-aventis, Novartis, Wyeth, GSK,
CSL and
Merck & Co. Crucell is headquartered in Leiden, the Netherlands, with
offices in
China, Indonesia, Italy, Korea, Malaysia, Spain, Sweden, Switzerland,
UK, the
USA and Vietnam. The Company employs over 1300 people. For more
information,
please visitwww.crucell.com.

Forward-looking statements

This press release contains forward-looking statements that involve
inherent
risks and uncertainties. We have identified a number of important factors
that
may cause actual results to differ materially from those contained in
such
forward-looking statements. For information relating to these factors
please
refer to our Form 20-F, as filed with the US Securities and Exchange
Commission
on April 7, 2010, in the section entitled 'Risk Factors' and in our
second
quarter 2010 financial results, as filed with the Securities and
Exchange
Commission on August 17, 2010 in the section entitled 'Risk
Paragraph'. The
Company prepares its financial statements under International
Financial
Reporting Standards (IFRS).

EGM information

Crucell will convene an Extraordinary General Meeting of Shareholders on
December 10, 2010 in Amsterdam, the Netherlands, to discuss the intended
offer
of Johnson & Johnson for all outstanding shares of Crucell not already
owned by
Johnson & Johnson. The statutory meeting for shareholders as required by
Dutch
takeover regulations will be held in January, 2011 in Amsterdam, the
Netherlands
(six business days prior to the expiration of the acceptance period of the
offer).